When German fund manager IVG sought to diversify its investor base beyond Europe to become a truly global capital source, it turned to CBRE Capital Advisors. The results were groundbreaking: CBRE raised more than US$230 million from a club of six South Korean institutional investors, enabling IVG to lead the investors to purchase Gallileo Tower, a 36-story office building in the central business district of Frankfurt.
The transaction represented the largest-ever cross-border South Korean club transaction, and the first time that these investors had invested in the German real estate market. Gallileo Tower, centrally located near the railway station and banking district, is currently leased on a long-term basis to Commerzbank.
CBRE’s London Equity Placement team and Capital Markets team in Seoul, South Korea, collaborated with CBRE’s Frankfurt Advisory team. “A lot of the initial work was in educating the capital about the opportunity to invest in Europe, Germany and the city of Frankfurt,” said Mark Evans, Executive Director, CBRE Capital Advisors.
The Equity Placement team prepared bespoke research to educate potential investors on the German real estate market, the investment and occupational market structure and current trends. The CBRE team presented IVG to a number of South Korean investors, and CBRE Korea escorted the investor groups to Frankfurt on six separate investor road shows.
“It was incredibly challenging to bring six groups, who had not previously invested in Germany, together to invest in one asset,” said Evans. “Each had different requirements and investment criteria; the biggest challenge was to align all the capital partners at the same time.”
Mr. Oliver Zimper, CIO of IVG Institutional Funds, said: “This transaction represents a pioneering landmark for the IVG investment and asset management platform in our internationalisation strategy. With this reference, our goal now is to raise additional equity in Asia and other international capital markets and invest in German and European properties.”